HealthSouth Corporation announced an agreement to sell its surgery division to TPG for approximately $945 million. The purchase price consists of cash consideration of approximately $920 million and an equity interest whereby HealthSouth has the opportunity to participate in the future success of the newly formed company. This future consideration is estimated to be worth $25 million to $30 million, assuming a five-year horizon. HealthSouth’s surgery division comprises 139 outpatient surgery centers and three surgical hospitals in 35 states. The new company will be among the nation’s largest providers of outpatient surgical services.
“Today’s announcement marks a major milestone in the strategic repositioning of HealthSouth as a post-acute healthcare provider, focusing on inpatient rehabilitative services,” said Jay Grinney, HealthSouth president and CEO in a statement. “The proceeds from this transaction will be used to pay down a significant portion of our long-term debt, thereby strengthening our balance sheet and positioning us to grow our core business.” Certain members of HealthSouth’s senior management team, including Mike Snow, COO, and Joe Clark, president of the surgery division, will be leaving HealthSouth to join the newly formed company, which is expected to remain headquartered in Birmingham, Ala.
